Square Enix enters agreement to sell game studios and IPs to Embracer Group

Square Enix announced today its agreement to sell three game studios and various intellectual properties to Embracer Group for $300 million USD.

The proposed sale includes the game studios Eidos, Crystal Dynamics and Square Enix Montréal, which have a total of close to 1100 employees in 8 studios around the world. Also included is a big catalogue of intellectual properties such as Tomb Raider, Deus Ex, Thief, Legacy of Kain and over 50 others, including original franchises. A specific list of the franchises that will move to Embracer Group, once approved, has not been announced. However, Square Enix will continue with its publishing duties with three franchises: Just Cause, Outriders, and Life Is Strange.

“We are thrilled to welcome these studios into the Embracer Group. We recognize the fantastic IP, world class creative talent, and track record of excellence that have been demonstrated time and again over the past decades. It has been a great pleasure meeting the leadership teams and discussing future plans for how they can realize their ambitions and become a great part of Embracer,” said Lars Wingefors, Co-founder and Group CEO at Embracer Group.

“Embracer is the best kept secret in gaming: a massive, decentralized collection of entrepreneurs whom we are thrilled to become a part of today. It is the perfect fit for our ambitions: make high-quality games, with great people, sustainably, and grow our existing franchises to their best versions ever. Embracer allows us to forge new partnerships across all media to maximize our franchises’ potential and live our dreams of making extraordinary entertainment,” said Phil Rogers, Square Enix America and Europe CEO.

What has many gamers surprised besides the sale itself is the amount both companies have agreed to. For many people, the sale of three developers and various franchises for $300 million USD is a very low price. Embrace has previously purchase Gearbox for $1.3 billion USD. One reason for the sale, according to SE, is the following: “The Transaction will assist the Company in adapting to the changes underway in the global business environment by establishing a more efficient allocation of resources, which will enhance corporate value by accelerating growth in the Company’s core businesses in the digital entertainment domain. In addition, the Transaction enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud.”

This announcement comes months after Square Enix stated its ambitious plans for Marvel’s Avengers did not prove to be as successful as it would have liked.

[Sources]: Embracer: Embracer Group enters into an agreement to acquire Eidos, Crystal Dynamics, and Square Enix Montréal amongst other assets – [Archive] – [Screenshot]. Square Enix: Execution of Share Transfer Agreement with Change to Subsidiaries (Divestiture of Select Overseas Studios & IP) – [Archive] – [Screenshot].